Israel has revoked the Jerusalem residency status enjoyed by four members of the Hamas terror group serving in the Palestinian Authority's parliament and living in Israel's capital.

Interim Prime Minister Ehud Olmert ordered the revocation following the suicide bombing in Tel Aviv Monday, which Hamas – now ruling the PA – defended as a legitimate act in the struggle against Israel.

The loss of Jerusalem residency means the Hamas officials will no longer receive money from Israel's National Insurance (Bituach Leumi) and will not be afforded the freedom of movement throughout all of Israel accorded those Arabs holding Jerusalem residency cards. Jerusalem's Arabs enjoy the unique ability to travel freely to all areas of the greater Land of Israel.

Foreign Minister Tzippy Livni told reporters that the move was her idea. This is the first time Jerusalem residency has been revoked for punitive reasons. Livni also urged Olmert, though, to refrain from classifying the Hamas-led PA as an "enemy" entity, but rather a "hostile" one.

The Hamas parliament members, one who is a cabinet member, are reportedly considering bringing the case to Israel's Supreme Court, which has in the past been sympathetic to Arab wishes to retain Israeli citizenship. Israel's Attorney General Menachem Mazuz, however, said that the revocation of Jerusalem residency, and even Israeli citizenship was legal under what he called "extreme circumstances" and will be defended if brought to the court.

Army Radio reported Thursday that the government is considering expanding the policy to include other known Hamas members and PA employees living in Jerusalem.

The Yisrael Beiteinu Party, which received 11 seats in last month's elections, ran on a platform calling for stripping large numbers of Israeli Arabs of their citizenship.

PA Justice Minister Ahmed Khalidi said the PA would fight on behalf of the Hamas officials due to the concern that Israel is establishing a precedent that can be used to strip more Jerusalem Arabs of their residency status.

The four Hamas officials from east Jerusalem whose resident status the government has decided to revoke have long been used to the dual life led by Arab residents of the capital, caught in the middle between Israel and the Palestinian Authority.

The rare decision to strip the three Hamas legislators and a cabinet minister of their Israeli identity cards, which grant them permanent residency in Jerusalem and freedom of movement the city and the West Bank, came a day after the Hamas-led Palestinian Authority government justified Monday's suicide bombing in Tel Aviv.

As city residents, Jerusalem's 240,000 Arabs receive an array of social services, including health care, unemployment and social security benefits.

The four Hamas officials have vowed to petition the High Court of Justice against the decision to revoke their residency rights, signaling months of legal delays, officials said Thursday.

Most of Jerusalem's Arabs hold permanent residency cards and Jordanian passports, having turned down full citizenship because they felt this would mean accepting Israeli rule over the city.

Since the reunification of Jerusalem, they have shunned municipal elections, but turned out to vote for Hamas in January's Palestinian Legislative Council elections.

Although the vast majority of Jerusalem Arabs have remained on the sidelines of violence over the last five years, preferring to focus on their coveted city jobs, most of the major suicide bombings in the city were carried out with the help of a local accomplice, whose freedom of movement proved invaluable.

Their Israeli identity cards have become increasingly valuable because of increased travel restrictions as a result of the construction of the separation barrier between Jerusalem and the West Bank.